OREANDA-NEWS. June 14, 2012. The National Bank of Belarus (NBB) will continue reducing the refinancing rate provided inflation growth is restrained. NBB Chairwoman Nadezhda Yermakova made a statement to that effect at a news conference on Tuesday in reply to a question voiced by reporters.

“According to preliminary data, inflation growth totalled 1.1% over the first three weeks of May. We will check it out at the end of the month: if the trend continues, we will be in a position to reduce the key rate a bit further down,” Yermakova said.

The NBB chief said she is opposed to the idea of abruptly reducing the refinancing rate as proposed by Belarus’ First Vice Premier Vladimir Semashko.

“Vladimir Semashko is in charge of the industry sector, and it just gives a pain in the neck. It is not because the National Bank has some controversies with the government. We all understand how things should work,” Yermakova said.

The NBB chairwoman mentioned a compromise scenario, which allows keeping the refinancing rate as high as it should be. However, the government will be authorized to partially compensate the burden of interest payments to borrowers where needed.

The National Bank of Belarus cut the refinancing rate by 2 percentage points down to 34% per annum on May 16, 2012. It was a fourth cut in the refinancing rate since early this year.

Belarus posted inflation growth at 6.8% in January-April.